By Peter Brackney Journal columnist
Source: The Jessamine Journal
A year ago, state legislators promoted legislation that would enable local governments with the ability to hold referendums for the implementation of a short-term sales tax.
In other words, the state tried to pass a law. That law happens to be a constitutional amendment, which requires approval by both the legislators and the people of Kentucky. The amendment, if approved, would have let county and city officials make a specific proposal. That specific proposal would then be put to voters before there could be a sales tax put into place. And at a pre-determined date, the tax goes away.
That process includes a lot of layers of democracy (and for convenience’ sake, I even skipped a layer or two).
But that is how a local-option sales tax works.
Consider the projects in Nicholasville and Jessamine County that would improve the quality of life or could spur economic growth. Several come to mind.
How about providing additional resources to the fire department? A year ago, Nicholasville’s ISO rating dropped because of understaffing and an insufficient number of stations particularly in Nicholasville’s western and northern neighborhoods.
What about putting in sidewalks? Providing a safe place to walk in Nicholasville and Wilmore is important not only for those unable to afford motor vehicles, but also to encourage people to exercise and to reduce their carbon footprint.
And while we are encouraging exercise, what about using the funds to build and promote our trails. Trails could be a major economic driver. Don’t take my word for it: drive 57 miles south to Livingston, Kentucky (or travel digitally to the city’s Facebook page: https://www.facebook.com/livingstonky).
There are a lot of good projects that could be a boon to Nicholasville, Wilmore and all of Jessamine County. And the prospect of improving infrastructure has made Wilmore mayor Harold Rainwater a proponent of the proposal that is being floated in this year’s session of the General Assembly.
Designated HB 1, the Local Investments for Transformation Act (or LIFT), has received top attention from leaders in Kentucky’s General Assembly. The designation as House Bill 1 means that it is the Speaker’s top priority for the session. And it seems that the Republican leadership in the state senate is also on board.
What reservations might legislators and local leaders have? In a time of shrinking government budgets, the need for innovative financing solutions is that much greater.
Some conservatives have likened LIFT to a tax hike. But it is not. An increase in taxes may be handed down by a legislative body on the citizens, but LIFT only creates the possibility that the citizens themselves might mobilize in support of a penny sales tax on themselves.
If the majority of citizens don’t want a project in their community, the tax won’t come to fruition.
On the other side, some liberal opposition to LIFT exists. A sales tax by its nature is regressive, meaning that it is more burdensome (as a percentage of income) on lower income families than it is on the wealthy. This is a valid concern, though it is important to note that food purchases are tax exempt (though admittedly, that doesn’t resolve the issue entirely).
The proposed constitutional amendment asks, “Are you in favor of giving local voters a new right to approve or reject the funding of specific local capital projects that would be paid for by a temporary local sales and use tax of no more than one percent, and that would expire when the capital projects are completed, as authorized by the General Assembly?”
Despite its drawbacks, giving local communities and the people of Kentucky the tools to fund projects of local import is the right step forward.